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The Final Fantasy title being worked on at GRIN before the studio collapsed is still in development by publisher Square Enix, GamesIndustry.biz understands.

Sources close to both parties have revealed that the game, initially signed off in Tokyo in the second half of last year and codenamed Fortress, was central to the collapse of the Swedish developer – Square took the project off GRIN after only six months of development due to concerns over quality issues.

Because business law in Sweden prohibits companies from going into debt without severe penalties, the developer was subsequently unable to bear its wage burden without new projects, and so closed its doors.

GRIN had previously worked with Square Enix' fellow Japan-based publisher Capcom on a new instalment in the Bionic Commando franchise, and while critical reception and sales numbers were relatively modest, GamesIndustry.biz has been told that the Japanese firm was pleased with the results.

But in the end the size of the developer's staff base meant that continuing indefinitely without concrete deals in the pipeline was impossible, and the company announced in August this year that is was shutting down due to an "unbearable cashflow situation".

As well as Bionic Commando, the studio released two other titles earlier this year – Wanted: Weapons on Fate and Terminator: Salvation – both of which scored poorly in the specialist press.